ch 13 econ

An economist estimates that 60 percent of the money that is being redistributed is lost to "leaks" such as administrative costs. If $25,000 is redistributed from a family in the richest quintile (earning $190,000) to a family in the poorest quintile (who earned only $15,000), how much money will actually be received by the poorer family? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices

10,000

Which of the following taxes is regressive? Raj pays a 10% tax on the first $10,000 he earns plus a _____ tax on any additional income. 5% 10% 15% 25%

5%

Which of the following is TRUE about a spell of poverty? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesAround half of spells of poverty last less than a year.People experiencing spells of poverty are a small proportion of those who enter poverty.Spells of poverty are often recurrent and are a large share of the poor at any time.Over half of all people who escape poverty will return to poverty within five years.

Around half of spells of poverty last less than a year.

Why is it important to consider more than just annual income when assessing inequality?The poverty rate is based on diminishing marginal utility, which depends on more than income.Living standards and the quality of life encompass more than just current income.Imports and exports should also be counted to get a full picture or earnings.Illegal activities skew GDP and GNP, and this impacts citizens' incomes.

Living standards and the quality of life encompass more than just current income.

Which of the following is NOT true about the incidence of poverty in the Unites States? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesChildren and single moms are the most likely to be in poverty.Some people spend much of their lives in poverty, while others fall on hard times briefly.More than half of all Americans experience poverty at some point in their lives.Most spells of poverty are permanent and recurrent.

Most spells of poverty are permanent and recurrent.

What would happen if the government redistributed until we all got the same income no matter what? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesThis would increase the total production in the economy.People would put more effort into work and businesses.People would have no incentive to work hard or start a new business.Those who are sick, disabled, elderly, or unemployed would be destitute.

People would have no incentive to work hard or start a new business.

Based on a wide range of information, is there any income inequality in the Unites States? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesNo, the U.S. poverty rate has not changed much in decades.No, the U.S. income distribution from 1970 to 2017 has not changed.Yes, the U.S. poverty rate has changed over time.Yes, the distribution of income shows the disparate shares of family income among the quintiles.

Yes, the distribution of income shows the disparate shares of family income among the quintiles.

Which tax is regressive? Arturo pays an 8% tax on the first $9,000 he earns plus _____ tax on any additional income. a 25% a 5% an 8% a 10%

a 5%

poverty judges the adequacy of resources to an unchanging standard. poverty compares contemporary society to the material standard of living. The poverty line is a(n) --- measure of poverty.

absolute relative absolute

The current U.S. poverty line measures poverty in that it measures the adequacy of resources relative to .

absolute an unchanging standard

judges the adequacy of resources relative to an unchanging standard.

absolute poverty

From the list below, select the measure(s) that are measures of inequality. Intergenerational mobility Spending Wealth Permanent income

all

Which of the following are drawbacks to redistribution of income? Select all that apply. Income redistribution leads to more tax avoidance. Income redistribution reduces the incentive to work. The administrative costs will reduce the amount of money to be redistributed.

all

According to diminishing marginal utility, which of the following people would gain the lowest marginal benefit from an extra $100 of income? Chin, a single person with an annual household income of $20,000 Devin, head of a three-person household with an annual household income of $120,000 Ariana, an actress with an annual household income of $1,500,000 Shawna, a single mother of three young children with an annual household income of $19,000

ariana

a. Your friend has been employed by the same company for two years but was recently laid off. She needs support while she searches for another job. You recommend that she look into unemployment insurance, which is not means-tested. a. Your friend always pays his rent on time, but he earns so little that he often doesn't have enough food at the end of the month. You recommend that he look into SNAP, which is means-tested.

c. Your friend fell while at work and broke her leg. She will not be able to return to work and do her job properly until the injury fully heals. You recommend that she look into workers compensation, which is not means-tested. d. Your friend and his family were doing fine, but since the birth of their new child, their income has been strained. He worries about providing medical care for his baby. You recommend that he look into Medicaid, which is means-tested.

You have learned that the demand curve is downward-sloping because of diminishing marginal benefit. When you apply this idea to your total income, you find that: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choiceseach dollar you get tends to yield you less benefit than the previous dollar.as your income increases, your benefits increase by the same amount.each dollar you get tends to give you more benefit than the previous dollar.as your income decreases, your purchasing power increases.

each dollar you get tends to yield you less benefit than the previous dollar.

Which of the following is a mean-tested social safety net program in the United States? earned income tax credit Social Security worker's compensation Medicare

earned income tax credit

When the definition of poverty focuses on relative poverty, a person is in poverty if the household income is: in the bottom 10% of household incomes in the nation. insufficient to provide basic food, shelter, medical care, and transportation. below $3.10 per day. is less than three times the cost of a basic food plan.

in the bottom 10% of household income is

Another tool of the U.S. government is to provide ---- transfers, such as SNAP benefits, instead of cash.

in-kind

Which of the following is NOT one of the four key reasons that the government provides in-kind benefits rather than cash benefits? An in-kind benefit like child care is a complement to work, which provides some incentive for recipients to provide for themselves rather than rely on the safety net. In-kind benefits give the recipient the greatest flexibility to choose what matters most. Taxpayers may care more about reducing homelessness or hunger than what will make the recipient happiest. Giving goods rather than cash prevents recipients from making bad choices.

in-kind benefits give the recipients t provide for themselves rather than rely on the safety net.

David, a coworker, just read an article about the "poverty trap" in the U.S. During the lunch break, he mentions that it is unfortunate that everyone in poverty is stuck there forever. David's observation iscorrect because low-income workers face too much discrimination to escape poverty.correct. Because of a high effective marginal tax rate, people living in poverty have no way to increase their incomes to higher quintiles.incorrect because the social safety net provides a way for low-income individuals to escape poverty.incorrect because many people experience poverty at some point in their lives, particularly when they are young.

incorrect because many people experience poverty at some point in their lives, particularly when they are young.

The advantage of the absolute standard approach is that: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices it is set equal to half the median income of a family.it tracks the minimal income relative to the contemporary standard of society.it reflects the public opinion about an adequate income to get by.it tracks through time how many people are below an unchanging standard.

it tracks through time how many people are below an unchanging standard.

----aid qualification, people receiving aid must meet low income requirements, while ---- aid is designed to insure everyone against bad outcomes.

means-based social insurance

The social safety net programs fall into one of two categories: progressive or regressive. means-based or social insurance. relative or absolute. wealth or income.

means-based or social insurance

The government tries to raise total well-being by equalizing the distribution of income. However, it involves the equality-efficiency trade-off meaning that: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices increasing tax rates increases the incentives to work.increasing tax revenue causes the government to offer more redistribution programs.redistribution causes people to pay higher taxes.more equal incomes may come at the cost of lower average incomes.

more equal incomes may come at the cost of lower average incomes.

Items or utilities that are considered essential in present-day U.S. society are not universally agreed upon. include a vehicle, a cell phone, and access to adequate nutrition. are determined by the U.S. government. include access to adequate nutrition exclusively.

not universally agreed upon

The _____ tells you that an important cost of working is what you must give up in order to work. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesopportunity cost principleincome redistributiondiminishing marginal utilitycost-benefit principle

opportunity cost principle

An income level below which a family is defined to be in poverty is known as the: needs-based indicator. relative poverty measure. bottom quintile. poverty line.

poverty line

Based on the income tax system in the United States, the rich should generally pay higher taxes. However, many rich individuals take advantage of in order to lower their effective tax rate. Using this method to lower your tax rate is

progressive special exclusions legal

Sales taxis a relatively small expense for both the rich and the poor.is relatively more expensive to the poor than to the rich.is relatively more expensive to the rich than to the poor.impacts poor and rich families in the same way because everyone pays the same percentage. b. A sales tax is ---

s relatively more expensive to the poor than to the rich. regressive.

Which of the following is a social insurance program in the United States? housing assistance Social Security Medicaid earned income tax credit

social security

The poverty line is a: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicessomewhat arbitrary threshold.share of income that is below average income.fixed threshold that applies to all families.rate that workers get paid below the minimum wage.

somewhat arbitrary threshold

The U.S. poverty line was originally set at one-third of the median income in the United States. sufficient income to provide for a family of four. three times the cost of a low-cost food plan. an income level of $1.90 per day.

three times the cost of a low-cost food plan.

Which of the following terms refers to all assets that you currently have? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choicesWealthPermanent incomeLiving standardsSocial safety net

wealth